Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290544 
Year of Publication: 
2023
Citation: 
[Journal:] Naše gospodarstvo / Our Economy [ISSN:] 2385-8052 [Volume:] 69 [Issue:] 3 [Year:] 2023 [Pages:] 1-11
Publisher: 
Sciendo, Warsaw
Abstract: 
Sales growth is essential for an enterprise's survival and financial growth.If an enterprise manages to achieve sales growth, its expansion can be accomplished. However, does sales growth always have only positive effects?If the enterprise is not collecting enough cash, it can miss a payment on its debt, triggering a series of events that can lead to its insolvency. The goal of the paper is to explore the relationship between an enterprise's sales growth and its insolvency. The relationship is tested empirically on the dataset of 4271 SMEs in Croatia. The results confirmed that there is a relationship between sales growth and insolvency. Better indicators exist with solvent andgrowing SMEs than with insolvent and non-growing. Results have also shown that high growth can be at the same time a high risk. The paper contributesto a deeper understanding of the relationship between sales growth and insolvency and empirically demonstrates that sales growth over 200% peryear induces the highest probability of insolvency compared to other lowerlevels of growth.
Subjects: 
SMEs growth
Insolvency risk
Sales growth
Financial indicators
Insolvency prevention
Bankruptcy
JEL: 
G30
G32
M21
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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